Builders could face penalties if they don't start housing jobs on time

Builders could face financial penalty and LOSE planning permission if they fail to start work on housing projects within 18 months under new proposals

  • Under new proposals, developers who do not start work on new houses within 18 months of being given the green light the planning permission could be revoked
  • After three years, they would have to pay council tax for unfinished properties
  • MPs hope ‘use it or lose it’ approach could help slow build rate of developments 

Developers should face financial penalties if they fail to build new homes as promised, MPs will say today.

Builders who do not start work on houses within 18 months of being given the green light would lose planning permission under the proposals.

And after three years they would have to pay the full council tax rate on each unfinished property, the housing, communities and local government committee is set to recommend.

Builders who do not start work on new developments within 18 months of being given the green light would lose the allocated planning permission under the proposals (file photo)

The ‘use it or lose it’ approach could help tackle the problem of the slow build rate of new developments – with as many as one million plots lying empty despite planning permission being granted – and so relieve England’s desperate housing shortage.

‘It is our view that the pace of completing planning permissions is too slow, and that carrots and sticks are needed to quicken the pace,’ the committee states in a report released today.

As well as encouraging greater use of small building firms and small sites, time limits for the completion of construction should be introduced.

The committee says: ‘The Government should set a limit of 18 months following discharge of planning conditions for work to commence on site.

‘If work has not progressed to the satisfaction of the local planning authority then the planning permission may be revoked.

Developers say local hostility and planning system are greatest barriers to homes being built

‘An allowance of a further 18 months should be allowed for development to be completed, after which the local authority should be able, taking account of the size and complexity of the site and infrastructure to be completed by other parties, to levy full council tax for each housing unit which has not been completed.’

Several town halls are backing the idea of financial penalties, with the Local Government Association stating: ‘If the Government is to meet its aspirations on build-out of new homes it needs to provide councils with the tools to encourage [or] oblige developers to build-out sites with permission in a swift and timely manner.’

But developers insist local hostility and the planning system itself are the greatest barriers to new homes being built.

The Conservative manifesto promised to increase the supply of new housing to 300,000 a year.

Latest figures show that 220,600 new homes were built in England in 2019-20.

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